On Weighting the Components of the Human Development Index: A Statistical Justification

By Georges Nguefack-Tsague, Stephan Klasen, Walter Zucchini. 2011

107 citations recorded by the source corpus.

Abstract The Human Development Index (HDI) published in the Human Development Report of the United Nations Development Program has been calculated as a simple average of the Life Expectancy Index, the Education Index and the Gross Domestic Product Index. This paper provides statistical support for the use of this seemingly arbitrary equal weighting of the three components by treating human development as a latent concept imperfectly captured by its three component indices. We show that a principal component analysis (PCA) based on the correlation matrix of the components leads to practically the same weights. Specifically we show that, for the period 1975–2005, the first principal component accounts for between 78% and 90% of the total variability in the data, and that its coefficients are positive and nearly equal. By normalizing the coefficients, the simple average weighting (1/3, 1/3, 1/3) scheme is obtained. The ranks of countries obtained using the PCA weightings are very similar to those based on the HDI. An advantage of the simple equal weighting is that one can define a simple index to measure the balance of a country’s development, given its HDI.

Subfields: Management Science and Operations Research, Sociology and Political Science, Statistics and Probability

View Paper: https://www.semanticscholar.org/paper/3a0f0e87c0abd15f97584fef2b31719d6219fc12

Citations in the corpus

• The HDI 2010: new controversies, old critiques (2011, unknown): “[37].”
• An automatic-democratic approach to weight setting for the new human development index (2012, unknown): “Nguefack-Tsague et al. (2011) also felt that using equal weights was arbitrary; they applied principal component analysis based on the correlations between the three components.”